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TMI Blog2024 (12) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... the period in dispute the Appellants paid service tax under the category of "Site formation and clearance, excavation and earthmoving and demolition" services under protest. Subsequently when category of 'mining services' was specifically enacted in section 65(105)(zzzy) of the Act, the appellant started discharging the service tax under the said category and found that the tax was not payable under the earlier entry of site formation. The Appellant was of the belief that their services as specifically falling within the taxable net only with effect from 01.06.2007 which is specific taxable entry considering their scope of work and therefore they were liable to pay service tax only with effect from 01.06.2007. The appellant also believed that the significant and predominant nature of activity involved in the contract was that of transportation of goods and that cannot be classified under earlier category and hence the tax was not required to be paid. 1.2 He further explains that the appellant has subsequently classified the services as "mining services" and discharged the service tax liabilities accordingly and which fact has been subjected to audit by the audit officers and accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y para 7 to 10. We find that the impugned order merely relied upon the clarification issued by CBEC vide No. B1/6/2005-TRU dated 27-07-2005 and No. 23222/2/2006-CX.4 dated 12.11.2007. We find that as regard merit of the case the issue is whether the services provided by the appellant were classifiable under "mining services" defined in section 65(105(zzzy) of the Finance Act, 1994 and if that be so whether the services were liable to tax under site formation category prior to introduction of the "mining services" i.e. 01.06.2007. To decide the issue, it is imperative to see the scope of services provided by the Appellant. We refer to the 053289/0003J/RP/Cont.Mines/06 dated 14.09.2006 entered into by the Appellants with M/s. Neyvelli Lignite Corporation Ltd. for Barsingsar, Rajasthan, copy of which is supplied by the appellant in the paper book. We find that the contract is for "hiring of crawler mounted shovels / hydraulic excavators, backhoes, dumpers for the removal of all types of overburden materials in all kinds of strata, including its drilling, blasting, excavation, loading, transport and dumping, spreading, dozing at specified places for the exposure of lignite at Barsingsa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holistic manner and which is here to win the minerals from the mine and transport them to appropriate places. 4.1 We now refer to the definition of "site formation and clearance, excavation and earthmoving and demolition" defined in clause (97a) of section 65 of the Act which is as follows :- "(97a) "site formation and clearance, excavation and earthmoving and demolition" includes, - (i) drilling, boring and core extraction services for construction, geophysical, geological or similar purposes; or (ii) soil stabilization; or (iii) horizontal drilling for the passage of cables or drain pipes; or (iv) land reclamation work; or (v) contaminated top soil stripping work; or (vi) demolition and wrecking of building, structure or road, but does not include such services provided in relation to agriculture, irrigation, watershed development and drilling, digging, repairing, renovating or restoring of water sources or water bodies;" 4.2 We also refer to the definition of taxable service given in section 65(105) as it concerns the above category which is as follows:- "(zzza) to any person, by any other person, in relation to site formation and clearance, excavation and ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or addition to what is not forthcoming from plain language of statute. Language in clause (97a) and (zzza) is plain, unambiguous and clear and therefore nothing more can be added to expand scope of it. Regarding, the inclusive nature of clause (97a), which cannot be interpreted to indiscriminately extend its ambit to all conceivable activities. It is a settled principle of statutory interpretation that while an inclusive definition permits the inclusion of additional items, its scope is inherently constrained by the class or category to which the defined terms pertain. This principle ensures that definitions are not expanded beyond their legislative intent to include activities of an entirely different nature. Accordingly, the activities performed by the appellant under the said contract do not correspond to the specified activities or their class as contemplated under clause (97a). Consequently, they fall outside the purview of clause (zzza) as well. 4.3 Now we refer to the definition of taxable services i.e. mining service given in section 65(105)(zzzy) which was brought to effect from 01.06.2007 which reads as - "to any person, by any other person in relation to mining of mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onging to a mine on which any process ancillary to the getting, dressing or preparation for sale of minerals or of coke is being carried on;" 4.5 We also refer to the definition of "minerals" given in section 2(jj) which means "all substances which can be obtained from the earth by mining, digging, drilling, dredging, hydraulicing, quarrying, or by any other operation and includes mineral oils (which in turn include natural gas and petroleum)". Examining the records in light of the given definition of "minerals", we find that the materials extracted from the mine be as overburden, are minerals. Further to it and by reading and interpreting meanings ascribed to the term "mine", we find as a fortiori that the activities undertaken by the appellant amounts to mining activity in a mine and therefore merits, without any hesitation and with legal backing, classification as mining activity. We also find from the records and findings of the lower authorities at all levels, that the revenue has not brought on record any contrary evidence to suggest that the activity undertaken by the appellant were not in 'mine' nor the same were in relation to 'mining'. It is obvious from the contract tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said contract that the activities undertaken by the appellant amounted to mining activity ipso facto. Following the decision of Doypack Systems P Ltd supra we also find that the activity relates to the mining of lignite which is mining of mineral. Accordingly, the services provided by the appellant are falling in the scope of clause (zzzy) of sub-section (105) of section 65 of the Act. 4.7 We also find from the given facts and records that the appellant has started to classify their activities under mining services i.e. clause (zzzy) which fact is evident from the Service Tax returns for the year 2008-09 and 2009-10 and accordingly discharged the service tax. We also find that the appellant has presented copy of final audit report issued by the department for the period ended on 31.03.2009 wherein no objection has been raised with respect to classification as mining services. Thus, looking to the facts that the services were classified by the appellant as mining services and that classification was accepted by the revenue, contention of the appellant to classify them under the said category for the period involved in the dispute merits consideration. 4.8 Having found and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the category of 'Mining Service' with effect from 1.6.2007 and it is admitted fact that the revenue had accepted the classification of the same service under 'Mining Service'. It also strengthens the case of the appellant that the service provided by them is of 'Mining Service' and does not fall under the category of 'Site Formation and Clearance, Excavation and Earth Moving and Demolition Services'." 4.9 Similar stand has been taken by Kolkata Bench of this Tribunal in case of Saumya Mining Pvt Ltd v. CST - 2024 (7) TMI 753 and G. S. Atwal & Co Engineers Pvt Ltd v. CST - 2023 (6) TMI 310. 4.10 Regarding the issue of classification between clause (zzzy) or (zzza) in terms of section 65A, it is necessary to evaluate the position as it existed in the statute on or after 01.06.2007 since prior to that clause (zzzy) was not existing. Considering that position after 01.06.2007, we find that the clause (zzzy) lays down more specific entry of taxable service than the clause (zzza). As discussed before, site formation and excavation category relates to different activities namely construction, geological, geophysical, soil stabilisation, land reclamation, contaminated soil stripping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable; (c) when a service cannot be classified in the manner specified in clause (a) or clause (b), it shall be classified under the sub-clause which occurs first among the sub-clauses which equally merit consideration." From the above provision for classification of taxable service, it is provided that if taxable service is prima facie classified under two or more sub-clauses of clauses under Section 65, classification shall be effected on the basis of sub-clauses which provides the most specific description as compared to sub-clauses providing more general description. In the facts of the present case, it is undoubtedly clear that between appellant and the service recipient M/s. GMDC even though the nature of activity independently is of excavation and removal of soil but the objective of this activity is for mining only. In case of any mining activity, the activity of removal of over burden is inevitable. If the contention of the revenue is accepted then in case of all mining activities, the activity of excavation, removal of soil will go out of mining service which is not the intention of the legislature. Therefore, considering the above provision for classification o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not falling within the meaning of "Site formation and clearance, excavation and earthmoving and demolition" defined in clause (97a) of section 65 of the Act. We also hold by following the principles laid down by the Apex Court that the said services cannot be subjected to tax prior to 01.06.2007 and accordingly the appellant merits refund of amounts paid by them. 4.13 However, facts relating to the contract number 53223 dated 07.12.2004 are not verifiable since the appellant have neither supplied the copy of the contract nor the relevant invoices. All the issues involved in the present case are significantly and dominantly factual issues in nature and therefore careful examination of the facts emanating from contemporaneous evidences is indispensable before reaching to any conclusion otherwise that will be complete miscarriage of justice to the other side. Thus, in absence of relevant materials, we do not wish to interfere in the impugned order to the extent that related to the services provided by the appellant under contract number 53223. 4.16 We find from the records produced by the appellant in relation to the contract no. 053289/0003J/RP/Cont.Mines/06 dated 14.09.2006 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made."
In view of above decision, which is followed by this bench in catena of decisions and the similar view taken by Hon'ble Gujarat High Court in case of UPL Limited v. UOI - 2021 (8) TMI 312, the appellant is entitled for interest from the expiry of 3 months from the date of original application filed for claim of refunds before the jurisdictional authority till the date of sanction.
5. In view of the above and our material finding from the facts and records that services provided by the appellant under contract are not preparatory work but they are mining activities per se, services provided prior to 01.06.2007 were not taxable and thus the impugned order is modified to that extent and the appellant is allowed refund of Rs. 4,60,77,978 with consequential relief of interest as per above. The appeal filed by the Appellants is partly allowed in the above terms.
( Pronounced in the open court on 26. 11. 2024 ) X X X X Extracts X X X X X X X X Extracts X X X X
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